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Monday, September 26, 2011

The Meg Whitman Era Begins at Hewlett Packard

There are some great articles in Channelnomics detailing what’s been happening at Hewlett Packard most recently. The “Anatomy of a Meltdown” chronicles the events since mid-August. http://channelnomics.com/2011/09/25/hp-anatomy-meltdown-recovery/ Being in Silicon Valley, you do get more of a sense of the flavor and history of the not so positive transformation of Hewlett Packard, beginning with the hiring of Carly Fiorina (acquired Compaq, wrecked the culture, $45 million parachute). She was followed by Mark Hurd (good eye for the bottom line, and grew the business, around a $20 million parachute). Then Leo Apotheker from SAP (probably the less said, the better), and now Meg Whitman.

Hopefully the Meg Whitman era won’t parallel what happened with Apple when Steve Jobs, recruited Sculley from Pepsi Cola. During the recruitment process, Jobs asked Sculley: "Do you want to spend the rest of your life manufacturing colored water or do you want to change the world?" Scully came to Apple, Jobs got pushed out. Sculley had 10 year tenure and grew revenue from $800 million to $8 billion before he was pushed out (and supposedly never really learned to use a Mac). Nonetheless, the company wasn’t in fantastic shape when he departed. Sculley never bonded with the engineers. Anyone remember the Lisa?

Whitman lacks a technology background. This will be a strike against her at Hewlett Packard. Call it a slight hurdle to overcome.

She made an interesting statement during her first interview with the press upon being named CEO.

"I have run a large company -- not obviously as large as HP, but I have run a very large company," she said. "While I don't have years of experience in an enterprise business, I bought a lot of software. I was one of the largest enterprise customers in Silicon Valley."

"That's like saying, 'I've bought an iPhone, so I can run Apple Inc." said Whitmore at Deutsche Bank.

Whitman joined Hewlett-Packard's board in January following her failed bid to become California's governor last year. During her campaign, she spent roughly $142 million of her own money. Cost per vote for the campaign, $46. That was a relative bargain. Her cost per vote to win the primary was $76 per vote. For a billionaire, Whitman can be just plain folks and seen at south bay restaurants with her significant other on weekends.

Before eBay, Whitman worked as an executive at the toy company Hasbro, the floral service FTD Inc., footwear maker Stride Rite Corp. and Walt Disney Co.

eBay made some acquisitions during Whitman’s tenure. Their acquisition of Skype proved to be an expensive $2.6 billion venture that didn’t pan out.

Whitman has said that a decision on what Hewlett Packard will do with their $40 billion PC division by the end of the year. Perhaps they’ll come to a final decision on the HP TouchPad well before then. I need another one to complete my coaster collection.

2 comments:

Leaders in technology companies are an interesting mix. Too technical, and they miss the customer orientation. Too marketing, and they don't have the respect of the engineers. In contrast with Apple and Sculley, there's IBM and Gerstner. Time will tell.

Meg is on the HP board. Her salary as CEO will be $1/year plus a lot of stock options. According to one article, nearly 2 million shares of HP stock at $23.59, close to Friday’s closing price. She won’t be able to cash in on at lest 900k of them for a year.